The World Bank has approved a total of $2.1 billion in concessionary loans to fund projects in Nigeria aimed at improving access to electricity and promoting governance. The World Bank has reported that more than half of the loans would be used to fund power and climate change projects and boost fiscal transparency.
Gregory Kronsten, the head macroeconomic research, FBNQuest, said that the FGN cannot cover the huge infrastructural deficit on its own, hence the agreements with the multilateral and other agencies. And as for the borrowing costs, the loans will attract sub-market confessional rates which are cheaper than the Eurobonds and naira bonds.
“This is positive for the Nigerian economy and the electricity sector. World Bank, being a development institution, usually lends money to projects and countries at a rate that is lower than the market rate and the tenor is usually longer than what most countries can access from commercial banks. ” Ayodele Akinwunmi, head of research FSDH Merchant Bank Limited have added responding to the World Bank loans.
High energy cost responsible for the competitiveness of Nigerian products-MAN
Ibrahim Usam, the vice president, North West zone, MAN, says the high cost of energy supply is the major cause of poor competitiveness of made-in-Nigeria products. According to him, the total expenditure on power in many emerging economies is nine percent, local manufacturers in Nigeria spend 30 to 40 percent on energy, and currently manufacturers in Nigeria self-generate as much as 13,000MW through alternative sources of energy in order to stay afloat.
Frank Jacobs, president of MAN, have expended over the 129 billion on alternative energy generation in 2016 and the cost of alternative electricity generation alone constitutes about 40 percent of production costs. With such high costs, made-in-Nigeria products will hardly be competitive, he said this at the special interactive forum on Eligible Customer Regulation of the Nigeria Electricity Regulatory Commission (NERC) held on June 28, 2018.
House to investigate alleged misuse of of$30b by NDPHC
The Niger Delta Power Holding Company is being accused of misuse of funds allocated to it. Hon. Yakubu Dogara , the speaker of the House of Representatives, has said that the house will investigate the alleged misuse of N10.08 trillion (about $30 billion) by the Niger Delta Power Holding Company (NDPHC).
Dogara stated this at the opening of a public hearing by an Ad hoc committee of the House, on the alleged constitutional Breaches, Impunity and other infractions of the NDPHC, and the Need to ensure Probity and Statutory Oversight Functions. He made the call while speaking at the Not-Too-Young-To-Run conference to celebrate President Muhammadu Buhari’s assent to the bill.